When a business grows, the local and national market sometimes falls short of its growth. Subsequently, thanks to globalization, enterprises, therefore, aim to expand globally. Entering the global market yields numerous benefits. Firstly, it increases the sales life cycle of the services and products by finding a new market. Secondly, it reduces the company’s dependency on a single market and provides insulation against the economic destabilization of the market. Lastly, it provides opportunities for business growth.
The Challenges Of The Global Market
Even though entering the global market has numerous benefits, it is often challenging. The five common challenges of international businesses are language barriers, cultural differences, global team management, inflation rates and the nuances of foreign policy and politics.
Also, a business must often implement a new marketing strategy to blend with the international market. Local competition is the other common problem an organization must encounter when entering a new market. Despite the challenges of the global market, it is possible to grow in it. Here are a few ways through which businesses can navigate their international journey.
Consider Cultural Difference
During global expansion, it is essential to consider the rich cultural diversity across the globe. Even though global expansions open new doors of opportunities, the risk of miscommunication associated with it is high. In addition to cultural differences, one should also pay attention to the language difference.
For example, suppose a company such as PNR Status which is running in the USA and plans to expand to India. It should be aware of Indian culture to develop a proper marketing strategy. Also, they should convert their content to the native language to reach the maximum potential customers. A marketing strategy used in the domestic market may only sometimes work in the international market.
Meet The Legal And Regulatory Compliance
Many businesses face the challenge of regulations and laws of foreign countries. Therefore, businesses must start preparing to meet the regulation and legal compliances right from the beginning. While looking into it, one must take special care of the taxation, trading regulations and requirements and employee legislation. Only after reviewing the trading scenario of the foreign market should a company proceed to enter it.
Manage Communication
When entering a global market, a firm must work towards building an international team. Therefore, a leader should plan the team’s communication while building the team itself. For example, suppose one is planning to expand to an Arabian country. In this case, it should ensure that their counterparts try to convert their language from English to Arabic to maintain smooth communication.
It is because a considerable portion of business success can be attributed to the interaction among the team members. Also, while managing the organization’s communication, monitoring the team’s performance is crucial.
Setting leadership protocols and rules is an excellent way to manage the team. Such an effective system helps address a global team, even if it is a remote team. The role of HR is massive in not only hiring an adequate workforce but also maintaining communication between them.
Research On Local Competition
Before entering a new market, thorough research of the local competition is necessary. When an organization is equipped with information such as what their competitors are selling, their market strategies and their position in the industry, they can plan better to establish themselves in the local market. Also, it helps one gain a competitive advantage in the market.
Set A Price Strategy
Competitive pricing is a must to leave one’s mark in the international market. When setting a price strategy, it is vital to ask what the price point of the product and service will be in the new market. Will this pricing be the same as the price of the domestic market? It is a tricky game to balance competitive pricing and profits.
One of the most promising ways to set a price strategy is by looking at the prices of similar products and services in the local market. Again, researching the local competition will give the businesses an idea of the price point that one should go for.
Lastly, one should prepare a budget for the international expansion of the business. Creating a three-year budget for the same is recommended, along with a one-year business plan to help it grow and survive for one year. Additionally, it is crucial to work on quarterly operating reviews.
Expanding a business in a foreign market is an arduous task, but at the same time, it is crucial to work towards it to ensure that the company touches new heights.
